International Union of Elevator Constructors, AFL-CIO v. National Elevator Industry, Inc.

• Decision Date: 12 September 1985
• Docket Number: AFL-CI,P,No. 1314,D,1314
• Citation: 772 F.2d 10
• Parties: 120 L.R.R.M. (BNA) 2474, 103 Lab.Cas. P 11,645 INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS,laintiffs-Appellees, v. NATIONAL ELEVATOR INDUSTRY, INC., Montgomery Elevator Company, Elevators, Inc., and Fairhall Elevator, Inc., Defendants-Appellants. Cal.ocket 85-7228.
• Court: U.S. Court of Appeals — Second Circuit

Page 10

772 F.2d 10

120 L.R.R.M. (BNA) 2474, 103 Lab.Cas. P 11,645

INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS, AFL-CIO, Plaintiffs-Appellees, v. NATIONAL ELEVATOR INDUSTRY, INC., Montgomery Elevator

Company, Elevators, Inc., and Fairhall Elevator,

Inc., Defendants-Appellants.

Cal. No. 1314, Docket 85-7228.

United States Court of Appeals, Second Circuit.

Argued June 20, 1985.

Decided Sept. 12, 1985.

Sally M. Armstrong, Washington, D.C. (O'Donoghue & O'Donoghue, Washington, D.C., Franklin K. Moss, Cohen, Weiss & Simon, New York City, of counsel), for plaintiffs-appellees.

Charles O. Strahley, New York City, (Michael T. McGrath, Putney, Twombly, Hall & Hirson, New York City, of counsel) for defendants-appellants.

Before VAN GRAAFEILAND and PRATT, Circuit Judges, and RE, Chief Judge, United States Court of International Trade. ^*

VAN GRAAFEILAND, Circuit Judge:

National Elevator Industry, Inc. and three elevator companies appeal from a judgment of the United States District Court for the Southern District of New York (Broderick, J.) compelling them to arbitrate discharge grievances with the International Union of Elevator Constructors, AFL-CIO. For reasons hereafter discussed, we affirm.

National is a New York membership corporation which operates as a trade association of employers in the elevator construction, maintenance and repair industry. Montgomery Elevator Company and Elevators, Inc. are two of its members. Fairhall Elevator, Inc. is an independent company in the same industry. For over fifty years, National has negotiated standard bargaining agreements with the Union on behalf of its members. The Union also has negotiated agreements with independent employers such as Fairhall, which incorporate by reference the terms of the Standard Agreements.

The three most recent Standard Agreements have had five year terms, commencing in 1972, 1977 and 1982. Each has contained an Article XV entitled "Arbitration", which prescribes a procedure for the resolution of all differences and disputes regarding the application and construction of the Agreement. In substance, Article XV establishes a National Arbitration Committee, consisting of three representatives appointed by National and three appointed by the Union. Any dispute which cannot be resolved at the local or regional level is to be referred to the Committee. If the Committee is unable to reach a decision or is deadlocked, the dispute is to be submitted to an impartial arbitrator, whose decision shall be final and binding.

The instant litigation involves grievances over the discharge of three employees by appellant companies, which occurred while the 1977 Agreement was in effect. When the grievances were submitted to the National Arbitration Committee, the Committee deadlocked on each of them. Upon appellants' subsequent refusal to submit the grievances to an impartial arbitrator, the Union commenced this action seeking to compel such submission. In the alternative, the Union requested a judgment declaring that its members were not precluded by the Standard Agreement from striking over unresolved employee discharge disputes. Following the filing of a joint stipulation of fact, each side moved for summary judgment. The district court granted the Union's motion and denied appellants'.

In appealing from the district court's judgment, appellants rely heavily, but erroneously, on two decisions by prior arbitrators under the 1972 Agreement. In 1973, one James Haigh was discharged by the General Elevator Company, a National member, and his discharge grievance eventually was submitted to an impartial arbitrator. Although it appears that the issue of arbitrability was not included in the submission to arbitration but was raised belatedly by National at the first hearing, the arbitrator held on March 7, 1974 that Haigh's grievance was not arbitrable before him. In 1975, a different arbitrator held that a dispute regarding a two-week suspension was arbitrable. In so holding, the second arbitrator distinguished disputes over suspensions from those arising out of terminations.

Contending that the instant action was brought for the purpose of vacating the two prior decisions, and expounding legal principles applicable to proceedings of that nature, appellants argue that the district court erred in "overturning" the prior decisions. This argument is without merit. The prior arbitrations involved different employees and a different agreement, and the parties did not ask the arbitrators to hand down decisions of a generalized nature that would be applicable to other employees and subsequent agreements. See Oil, Chemical & Atomic Workers International Union, Local 4-367 v. Rohm & Haas, Texas, Inc., 677 F.2d 492, 493 (5th Cir.1982) (per curiam). The former decisions are not the subject of this litigation, and, for a good reason, have no binding precedential effect herein.

As a general rule, an arbitrator's decision will not be set aside on direct review despite the fact that he may have misinterpreted either the facts or the law. Marcy Lee Manufacturing Co. v. Cortley Fabrics Co., 354 F.2d 42, 43 (2d Cir.1965) (per curiam); Amicizia Societa Navegazione v. Chilean Nitrate and Iodine Sales Corp., 274 F.2d 805, 808 (2d Cir.), cert. denied, 363 U.S. 843, 80 S.Ct. 1612, 4 L.Ed.2d 1727 (1960). The same principle applies to an arbitrator's alleged misinterpretation of a contract. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362, 4 L.Ed.2d 1424 (1960). However, if an arbitrator's decision is unsound, it would not make good sense to treat it as binding in subsequent arbitrations....